Illinois Supreme Court to Decide Whether State Treasurer Needs an Appeal Bond to Challenge Workers Comp Award

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Although Illinois courts are courts of general jurisdiction presumed to have subject matter jurisdiction, this presumption doesn’t apply to workers’ compensation proceedings. Pursuant to Section 19(f)(2) of the Workers’ Compensation Act (820 ILCS 305/19(f)(2)), in order to vest the circuit court with jurisdiction to review an award made by the Commission, a party must file an appeal bond with the clerk.

In the closing days of its May term, the Illinois Supreme Court agreed to decide whether this general principle applies to the Illinois State Treasurer, sued as ex officio custodian of the Injured Workers’ Benefit Fund. The Court granted leave to appeal from a decision of the Workers’ Compensation Commission Division of the First District in Illinois State Treasurer v. The Illinois Workers’ Compensation Commission.

The claimant in Illinois State Treasurer is a home healthcare provider who was injured when she fell on a flight of stairs at a patient’s home. Because her employer had no workers’ compensation insurance, the claimant added the Injured Workers Benefit Fund as a co-respondent. The Fund was established by state law to provide workers’ compensation benefits to injured employees of employers who fail to obtain insurance. It is funded by penalties and fines collected by the Commission from uninsured employers.

The arbitrator upheld the claimant’s claim and awarded benefits. The State Treasurer appealed the ruling, first to the Commission – which affirmed the arbitrator – then to the circuit court – which affirmed again, and finally to the Appellate Court. The Appellate Court initially reversed the award, but on remand, the claimant raised for the first time a challenge to the Appellate Court’s jurisdiction.

The claimant argued that the court lacked jurisdiction for two reasons. First, she argued that her claim was one against the State of Illinois, and therefore immune from judicial review pursuant to the Act. Second, the claimant pointed out that the Treasurer had failed to file an appeal bond. The Appellate Court rejected the first argument on the grounds that the State was not liable for any portion of any judgment that might be returned against the Fund, but the second argument presented a more difficult problem.

The Act expressly exempts “[e]very county, city, town, township, incorporated village, school district, body politics or municipal corporation against whom the Commission shall have rendered an award for the payment of money” from the requirement to post a bond. The Court pointed out, however, that it said nothing about the State Treasurer in his capacity as custodian of the Fund. Thus, in a sense the claimant’s two theories caught the Treasurer in a Catch-22: if the Treasurer claimed to be the State, no bond would be required, but judicial review would be barred on sovereign immunity grounds, and if the Treasurer denied being the State, judicial review would be permissible in theory, but the missing appeal bond would be a fatal problem.

The Treasurer argued that reading the Act in context showed that the bond requirement applied only against employers who have judgments awarded against them. The Court disagreed, noting that if the legislature had intended to limit the requirement to employers, it would have simply said so. Instead, the legislature used the broadest possible phrase: “the one against whom the Commission shall have rendered an award for the payment of money.” The Treasurer noted that appeal bonds are not required of State officers in other contexts, but the Court rejected that argument, noting that courts should be wary of reading implied exemptions into jurisdictional requirements based on other, unrelated statutes. The Treasurer noted the express exemption for various governmental entities, but the Court cited the maxim expressio unius – listing exemptions is an implied exclusion of other, unlisted exemptions – to conclude that the express exemptions cut against the Treasurer’s argument.

Finally, the Court found that refusing to exempt the Treasurer from the bond requirement was sound public policy. Injured workers had no recourse if the Fund was inadequate to pay awards – they are required to accept a pro rata share of the remaining monies in partial payment. Although state law expressly bars the legislature from diverting monies from the Fund into any other use, the legislature has already done just that at least twice – raising the specter of a future shortfall in the Fund. Requiring the bond, the Court wrote, will protect claimants against the possibility that such a shortfall might leave them without full compensation.

We expect Illinois State Treasurer to be decided within six to eight months.

Image courtesy of Flickr by Meshugas.

 

Topics:  Appeals, Bonds, Home Healthcare Workers, Judicial Review, State Treasurers, Subject Matter Jurisdiction, Uninsured Employers Fund, Workers Compensation Awards

Published In: Administrative Agency Updates, Civil Procedure Updates, Civil Remedies Updates, Labor & Employment Updates, Worker’s Compensation Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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